Corporate Finance

SAP to Acquire Cloud Business Callidus for $2.4 Billion

Europe’s largest software group announced on January 30th its biggest acquisition for three years, buying Callidus Software, a company providing cloud-based Lead to Money (Quote-to-Cash) solutions.

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Europe’s largest software group announced on January 30th its biggest acquisition for three years, buying Callidus Software, a company providing cloud-based Lead to Money (Quote-to-Cash) solutions.


SAP will pay $36 per share, representing a 21% premium over CallidusCloud’s 30-day volume weighted average price per share. This per-share purchase price represents an enterprise value of approximately $2.4 billion.

 

California-based CallidusCloud offers a full suite of sales performance management (SPM) and configure-price-quote (CPQ) solutions, including sales enablement, sales analytics and customer engagement. This acquisition aims to combine CallidusCloud’s Lead to Money suite for sales with SAP’s own customer engagement suite, strengthening SAP’s position in the customer relationship management (CRM) space.

 

SAP has been expanding cloud-based services to challenge rivals such as Salesforce and Oracle, yet after having absorbed SuccessFactors ($3.4 billion, 2011), Ariba ($4.3 billion, 2012) and Concur Technologies ($7.4 billion, 2014), the group has been relatively quiet in its external growth. Two other recent acquisitions of smaller software companies Abakus (2016) and Gigya (2017) had undisclosed deal values.

 

SAP America has entered into an agreement with the CallidusCloud board of directors who unanimously approved the transaction. SAP will fund the acquisition with existing cash balances and an acquisition term loan. The transaction is expected to close in the second quarter of 2018, subject to approval from CallidusCloud stockholders and regulatory authorities.

 

Headquartered in Walldorf, Germany, SAP reported total revenue of €23.76 billion for the 2017 financial year, recording growth of 8%, which included its could subscription & support services, which grew by 28%.

 

 

J. Y.

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